The problem with customer data
Businesses today operate in a digital-first landscape. In order to provide the level of service and digital experience that customers expect, brands are stitching together many use-case-specific tools that help them process orders, manage shipping logistics, optimize onsite experiences, and more. Valuable customer data lives inside each and every one of these solutions.
The problem? In the modern tech stack, customer data is living everywhere, and brands lack a central source of truth. And what good is data if you can’t access it, see it in context, or draw actionable insights from it?
Understand customer data platforms
A customer data platform (CDP) is a system that collects data across multiple sources and unifies data around customer profiles to give brands a truly holistic “single view” of each customer. CDPs surface your data and make it available for:
- Transformation
- Distribution to other systems
- Activation and engagement across all marketing channels
The evolution of CDPs
When CDPs first hit the market, they were primarily designed for large enterprise businesses. These firms traditionally marketed across a huge spread of channels (both owned and paid media), they had customer data spread across multiple silos (in-person and digital sources), and they had money to invest in complex technology that could help them unify it all.
The first CDPs were incredibly technical, and required an entire team of developers and engineers to set up and maintain. This meant a ton of implementation and recurring overhead cost for businesses. Thus, price and resourcing was always a limiting factor, restricting access to unified data to only the largest brands.
What challenges can a CDP help solve?
Most online brands will face challenges when it comes to managing customer data. While the scale and severity of each pain point may vary, these challenges tend to be universal across digital brands, spanning all industries and business sizes. Explore the top challenges that a CDP can help solve.
Data is scattered everywhere.
A CDP will ingest and unify data from every piece of your tech stack. The goal is to give you a real-time, accurate, and complete picture of your customers. A great CDP tool will have pre-built integrations that make it easy to hook all of your data to your central database. It will also provide development resources like SDKs, open APIs, and bulk data ingestion to hook custom sources up to the CDP. Many brands will integrate their CDP with a data warehouse such as Redshift or Snowflake.
Data coming in from various sources is inconsistent and hard to standardize.
When you generate and house data across multiple tools, it’s hard to achieve consistency. CDPs can help you maintain data cleanliness by automatically manipulating and standardizing that data. CDPs can also transform data into more usable forms and enrich data with additional context to make it more actionable. Many CDPs will offer identity resolution and identity management capabilities, helping to automatically merge user profiles by matching up personal identifiers across touchpoints.
It’s tough to actually do anything meaningful with your data.
Ultimately, CDPs allow you to actually use all of your customer data to power better and more cost-effective marketing initiatives. You can send this data to third-party advertising platforms to help get a better return-on-ad-spend by spending money on accurate, hyper-targeted segments. You can also integrate your CDP with a business intelligence (BI) or external reporting tool that allows you to conduct deep technical analysis on your customers.
Data-powered insights aren’t just for enterprise
Since the initial launch of the CDP market, the business and technological landscape has changed tremendously. Now, businesses of every size have access to more data than ever before. Brands are achieving sophisticated automations and are creating personalized experiences using a smattering of low-code/no-code point solutions.
But with so many solutions stacked together, non-enterprise businesses are now facing the same problems as the old Goliaths: they need a better way to unify, manage, and utilize their data. That's where Klaviyo's solution comes into play: Advanced KDP.
Ready to begin using Advanced KDP? Take our course: Getting started with Advanced KDP today.